Open AccessThe financial arrangements in Latin America to contribute to the shock resistance of member countries
Author(s) -
Natalia Khmelevskaya
Publication year - 2015
Publication title -
iberoamerikanskie tetradi
Language(s) - English
Resource type - Journals
eISSN - 2658-5219
pISSN - 2409-3416
DOI - 10.46272/2409-3416-2015-3-91-97
Subject(s) - latin americans , market liquidity , shock (circulatory) , exchange rate , scope (computer science) , capital (architecture) , international economics , economics , capital flows , financial system , member states , business , vulnerability (computing) , capital market , finance , european union , market economy , liberalization , political science , medicine , law , programming language , computer security , archaeology , computer science , history
The article focuses on financial arrangements and schemes in Latin America insofar they may help countries cope with external vulnerability in trade and capital markets. The Latin America Reserve Fund (FLAR) has been created to cushion liquidity in case of sudden stops in capital flows and trade deficit. The SICAP-ALADI, SUCRE and Mercosur SML are designed to mitigated exchange rate shocks. To strengthen national systems is the common target for these arrangements. Hereof, they sustain business activity and promote growth and structural reforms. To be more pertinent to member-states needs and able to react fast to credit crunches or price movements these institutions have wide scope of instruments.